INDEX SCREEN DEFINITIONS FOR THE ESG ADVANCED EQUITY SUITE

Many of our iShares sustainable ETFs seek to track an index with business involvement screens. Business involvement screens seek to remove exposure to controversial business activities that may pose risks or violate an investor’s preferences. Learn more about the specific screens below.

Note: Fossil fuels, nuclear power and palm oil follow a three-step approach, whereby companies are excluded on conditional bases.

 

SCREEN DEFINITION
Adult entertainment Companies that produce, direct, or publish certain adult entertainment materials; companies with 5% or more aggregate revenue from production, distribution, or retail.
Alcohol Companies with 5% or more revenue from manufacturing; Companies with at least USD 500 million revenue or 15% aggregate revenue from manufacturing, distributing, retailing, licensing, and supplying alcohol-related products.
Civilian firearms Companies that manufacture, derive 5% or more aggregate revenue or USD 20 million or more revenue from the production and distribution (wholesale or retail) of firearms or small arms for civilian use.
Conventional weapons Companies deriving 5% or more revenue from the production of conventional weapons and components or 10% or more aggregate revenue from weapons systems, components, and support systems and services.
Controversial weapons Companies with any tie to Controversial Weapons (cluster munitions, landmines, depleted uranium weapons, biological/chemical weapons, blinding lasers, non-detectable fragments and incendiary weapons), as defined by the methodology of the MSCI Global Ex-Controversial Weapons Indexes.
For profit prisons Companies with 50% or more revenue from involvement in the operation of “For profit prisons” or the provision of integral services to these types of facilities.

Fossil fuels
  1. Identify all companies that belong to the Energy GICS© Sector (GICS© Code - 10) or have an industry tie to fossil fuels (thermal coal, oil and gas) – in particular, reserve ownership, related revenues and power generation. This list does not include companies providing evidence of owning metallurgical coal reserves.
  2. Identify all companies flagged in Step 1 that additionally derive 50% or more revenue from products, services, or infrastructure projects supporting the development or delivery of renewable energy and alternative fuels, if they do not have:
    • an industry tie to thermal coal (i.e., reserve ownership, production, and power generation),
    • an industry tie to oil sands (i.e., reserve ownership and production activities), or
    • evidence of owning fossil fuel reserves used most likely for energy applications.
  3. All companies identified by Step 1 and not by Step 2 are excluded.
Gambling Companies with 5% or more revenue from ownership or operation gambling facilities, companies with at least USD 500 million revenue or 15% aggregate revenue from ownership or operation, provision of key products and services, and licensing gambling-related business activities.
Genetically modified organisms (GMOs) Companies with any revenue from genetically modifying plants and other organisms intended for agriculture or human consumption.

Nuclear power
  1. Identify all companies that own or operate nuclear power plants, active uranium mines, are involved in uranium enrichment and processing, the design and engineering of nuclear power reactors, or derive 15% or more aggregate revenue from ownership or operation of nuclear power plants and supply of key nuclear-specific products or services.
  2. Identify all companies flagged in Step 1 but derive 50% or more revenue from products, services, or infrastructure projects supporting the development or delivery of renewable energy and alternative fuels.
  3. All companies identified by Step 1 and not by Step 2 are excluded.
Nuclear weapons Companies that manufacture nuclear warheads and/or whole nuclear missiles, components, delivery platforms or provide auxiliary services related to nuclear weapons.

Palm oil
  1. Identify all companies deriving more than 0% revenue from cultivating oil palm trees and harvesting fresh fruit bunches (FFBs) used to produce palm oil products, or 5% or more revenue from distributing palm oil products.
  2. Identify all companies flagged in Step 1 but have 75% or more of their palm oil holdings / estates certified by the Roundtable on Sustainable Palm Oil.
  3. All companies identified by Step 1 and not by Step 2 are excluded.
Predatory lending Companies with 5% or more revenue from products and services associated with certain controversial lending practice.
Tobacco Manufacturers; Companies with 5% or more aggregate revenue from manufacture, distribution, retailing, licensing, and supply tobacco products.

Please refer to the index methodology for more information